Navigant Research Blog

E-Bikes Take Center Stage at Colorado Bike Expo

— May 14, 2015

The Colorado Bike Expo on April 25 showcased the latest products in the industry to kick off the fresh 2015 cycling season. The event, held at the Colorado Convention Center in Denver, had around 100 exhibitors. The presence of electric bicycle (e-bike) manufacturers and distributors at bicycle events like the Expo has grown substantially over the last few years as interest in the technology continues to grow at a rapid pace.

Improving Technology

Several notable improvements have been made to 2015 e-bike models over previous years. The range capabilities provided by e-bike batteries have dramatically improved, with most models at the event providing a lengthy 40–60 miles of range per charge. Previous e-bike models generally had a range of 15–25 miles. The weight of the bikes has also dropped, making them easier to ride, transport, and store. 2015 models generally weigh between 40 and 45 lbs, while models just a year or two ago typically weighed between 50 and 55 lbs. Additionally, a new model from Pedego allows the e-bike to be charged directly from an outlet, eliminating the need to remove the battery from the bicycle before charging.

Upgrades have been made on the software side as well. Some e-bike models are now Bluetooth compatible and can connect with a riders’ smartphone. The rider can customize and save the pedal-assist power settings of the e-bike to avoid having to reprogram the settings each time the bike is turned on and off. New safety and security features have also been added through this new level of connectivity. If a rider believes their e-bike has been stolen, a press of a button on their smartphone instantly locks the bike in place and a GPS tracker shows the rider the exact location of the bicycle. While some new advances in the regular bicycle market were also showcased (such as ultra-lightweight models), e-bikes stole the show in terms of technology capabilities.

Future Outlook

Navigant Research’s Electric Bicycles report forecasts that annual sales of e-bikes in North America are expected to rise from 179,000 in 2015 to nearly 300,000 by 2023. Longer electric range, reduced vehicle weight, and advanced software capabilities are all helping to move the market in this high-growth direction. Steadily reducing lithium ion battery costs left most e-bike representatives at the Expo believing that the cost difference between similar quality bicycles and e-bikes will be negligible in just 2–3 years.


The Comms Are the Cloud

— May 14, 2015

The Internet of Things (IoT). Smart grids. The energy cloud. What do all of these have in common? In order to achieve their promise, ubiquitous, high-speed, high-bandwidth communications networks will be needed. The energy cloud, as described in Navigant Research’s white paper, is expected to radically change the electric power industry over the coming decades. The energy cloud will emerge as the old-school, centralized monopoly utility model transforms into a decentralized, intelligent, two-way grid where utilities, markets, and prosumers transact in real-time for a cleaner, more efficient, reliable, and cost-effective energy industry. The potential in the long run is huge.

But today, adequate, ubiquitous communications that meet utilities’ needs for smart grid technology simply haven’t been widely deployed. Even in North America and Europe, where smart grid efforts have been underway for a decade or more, the infrastructure in place to transport all of that valuable data to the systems and devices that need it is, at best, a patchwork quilt of legacy and newer technologies, deployed in an ad hoc manner. The energy cloud won’t become a reality until seamless, high-speed, interoperable communications networks are present gridwide.

Utilities struggle with their communications networking strategies, even as the media waxes enthusiastically about the IoT and the coming nirvana of 5G technology; the recently announced mega-merger between Nokia and Alcatel-Lucent has been attributed to the marriage of the advanced wireless and wired communications that 5G capabilities will demand. But 5G networks are a decade away; a bit of a reality check is in order. Here’s the good news—and the bad news—about communications and the energy cloud.

The Good News

Perhaps the best news for vendors and service providers is the massive demand for utility communications that the energy cloud will engender. Navigant Research estimates that communications gear for basic smart grid communications technology will be a $30 billion opportunity over the next decade.

Communications Node Revenue by Region, World Markets: 2014-2023

Blog chart - RE(Source: Navigant Research)


This is likely conservative, based on expectations for deployment of advanced metering infrastructure (AMI), distribution automation and substation automation technology, and on the leading communications technologies used today—microwave, 900 MHz mesh, cellular, etc. (Detailed forecasts can be found in Navigant Research’s report, Smart Grid Networking and Communications.)

Additive to the infrastructure markets included in this forecast will be service fees collected by comms providers, independent network providers (see PDVwireless), networks for electric vehicle charging networks, connected solar panels, and more.

Remember the cell phones of the nineties? The novelty of being able call someone from outside of the home or office? That’s where we are today in terms of smart grid connectivity and applications. We can measure power consumption thanks to smart meters; we can monitor grid devices thanks to new sensor technology. That visibility provides a wealth of knowledge to grid operators—it’s great!

Now think about the explosion of applications—and revenue—that smart phones combined with 4G networks has allowed. That’s where the energy cloud is heading.

The Bad News

Solving the problem of ubiquitous connectivity—with low latency, high bandwidth, and seamless interoperability—is no small task.  Utilities tend to invest in the lowest cost connectivity solution for the application at hand. Once an AMI network is in place, utilities then begin to think about ways to leverage those networks. Now that we can connect to the meter, we could try (insert the smart grid application du jour here)! But all too often, the network in place wasn’t configured with that application in mind. Existing networks can be a serious limiting factor to cutting-edge smart grid applications. But those sunk investments have to be depreciated and a new rate case may be many years away.

Cautious Optimism

Despite the challenges utilities face in developing holistic, long-term, gridwide communications strategies, it will happen. It will take years—maybe decades—but the energy cloud revolution is already underway. Build the comms, and the energy cloud will come.


Do Shared Vehicles Need Standard User Interfaces?

— May 14, 2015

Personal mobility is in the early stages of the most significant transformation since the birth of the Ford Model T more than a century ago. A shift from personal ownership to shared use of vehicles is expected to accelerate as an important means of enabling mobility while alleviating the negative aspects our transportation ecosystem. Navigant Research’s report, Alternative Revenue Streams for Automakers, projects that there were will be more than 26 million members of carsharing services by 2023. Automakers recognize the threat this change represents to their business model, and they are scrambling to adapt, but what about the drivers constantly exposed to changing user interfaces every time they use a different vehicle?

As thousands of engineers from across the globe gathered in Detroit recently for the SAE 2015 World Congress, one of the more surprising topics of discussion was whether vehicles should adopt a common human-machine interface. While politicians like to point at the rise of cellphone use in vehicles as a cause of driver distraction, more fundamental design issues can be just as problematic. As more functionality comes to vehicles, controls are needed. Anyone using a new vehicle for the first time is likely to be overwhelmed trying to figure out basic functions like climate control. Manufacturer’s desire to differentiate their products just makes things worse.

Taking Action against Distraction

When Apple introduced the iPad in January 2010, late-CEO Steve Jobs said that anyone that knew how to use an iPhone already knew how to use an iPad. A big part of Apple’s success over the years has been the consistency of its user interfaces. They evolve over time, but they stay consistent enough that users can migrate from one product to another. The same cannot be said for most automobile features, which often vary widely within an individual brand’s lineup.

David Acton, managing principal of P3 North America, suggested at the congress that all vehicles should have a common user interface to help avoid the distraction. This may actually be a step too far considering the technologies available now and in the near future. For example, the Tesla Model S already features a 17-inch touch screen display in the center console for the various controls and displays with another reconfigurable display screen in the traditional instrument location ahead of the driver. As a virtual control interface, these displays can be reprogrammed to suit a driver’s needs.

Google’s Chrome browser and ChromeOS automatically save a user’s settings to the cloud, reloading bookmarks and extensions whenever that user logs in from any computer. Logging out can delete those settings from the machine. If every manufacturer were to include reconfigurable control and display surfaces in their vehicles, a driver could set preferences and then immediately save them either to a cloud account or locally on a phone they connect to the vehicle. From then on, every time they get behind the wheel of a new vehicle, they could connect their phone or log in to instantly retrieve their preferred control layout. Preferences could even include physical settings like the seat and mirror positions.

Best of all, these virtual control surfaces could be integrated into surroundings that still leave flexibility for designers to differentiate their products. The combination of virtual controls and connectivity could enable a blend of personalization and familiarity that reduces complexity for drivers as we make the transition toward a more shared transportation ecosystem that reduces urban congestion and energy use.


For Swiss-German Hydropower Subsidies, an Imbalance Flows

— May 14, 2015

During a recent vacation in Switzerland, I made a day trip to the beautiful city of Thun, where the Aare River cuts through the middle of the city. As I sipped white wine and watched the river flow, I thought about how high the water level was, how fast the currents were moving, and how this must be good for the Alpine country’s hydropower production. When I mentioned this to my Swiss-German friend, Marco, he gave me an interesting perspective on hydropower and foreign renewable energy subsidization.

Marco, a Swiss citizen living in Germany, explained to me that hydroelectricity is the backbone of Swiss energy. Switzerland generates 58% of its energy from hydroelectricity, and the rest of the country’s energy comes from nuclear (36%), thermal, biomass, solar, and wind power (6%). The system works well, where nuclear power and hydroelectricity ensure stability in meeting electricity demand, while the newer renewables assist with peak loads and exports to neighboring countries.

Opening the Flood Gates

However, Marco explained, Germany, which shares a border with Switzerland, has caused trouble for the Swiss energy system with its renewables policy. Germany’s high solar and wind subsidies have dramatically lowered the price of electricity (although private households pay for subsidies as part of their energy bill), and now large hydroelectric facilities in Switzerland, which are not subsidized, are no longer profitable. In fact, 24 of the 25 hydroelectric facilities planned for construction in Switzerland are unprofitable. This means that hydroelectricity investment has been put on hold because it cannot compete. With hydroelectricity costs on the rise and the Swiss on the outs with nuclear power, the country may have to revert back to old coal plants or electricity imports from neighboring countries—which would likely come from coal. Ironically, Switzerland has responded to this subsidy problem by starting its own subsidy for smaller hydroelectric facilities (<10 MW).

The German subsidies have even farther-reaching consequences, some of which hinder the success of the very energy technologies they are supporting. The boom of solar and wind has led to an increased need for electricity storage, as both energy sources are unsteady. Alpiq, a major Swiss energy producer, is investing €1.5 billion ($1.71 billion) in a new pumped storage facility in the Alps, but the project’s economic success is uncertain. If these facilities do not prove profitable, their construction will come to a halt. Without these storage facilities, wind and solar offer little benefit to the energy supply.

In the United States, wind power generators beg for consistent and reliable subsidies to help take care of initial investment expenses, so it is hard to believe that subsidies for any renewable energy could be negative. However, Marco made it clear that he thinks there must be changes to restore balance in the system (i.e., abolishing or reforming German subsidies). As a concerned Swiss citizen, he believes that this would stop the spiraling subsidization and increase CO2-free electricity. He is not the only Swiss-German who feels this way.

Alpiq published a report (which can be viewed here) that came to very similar conclusions. Regardless of whether you believe subsidies for renewable energies are positive or negative, hydropower in Switzerland is in a dire situation and reforms in subsidies are needed to restore balance. For me, it was a tragedy to sit in Switzerland, sipping wine and watching the beautiful river flow, knowing that perfectly viable hydroelectricity will not be generated.

To learn more about German subsidies with respect to wind, see Navigant Research’s World Wind Energy Market Update 2015.


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